Almost half of Dell's full-time US workforce has rejected the company's RTO push
businessinsider.com
businessinsider.com
Based on my network, their reasoning is a mix of:
- communication breakdowns due to the difficulty of building an async communication model (remember that most people are not as text/writing and async driven as Internet commenters on a tech forum), and operational work like quarterly planning, QBRs, product line prioritizations, etc can be done much faster in person instead of over 10-15 Zoom calls over 3-5 weeks.
- situations where remote workers are domiciled in a different location from where they were hired AND they didn't tell HR (this leaves companies legally liable for various tax, business incorporation, and safety regulations)
- the occasional case where a major security incident occurs due to lack of in-person verification (eg. The recent North Korea remote worker scandal, the ongoing Snowflake breach)
- Justify US headcount. One of the portfolio companies I was an observer for went public a couple years ago. When they switched to remote during the pandemic, they realized they could cut down their entire US engineering presence and overhire in Eastern Europe, Israel, and India and drastically reduce margins. Most larger institutional investors are clamoring for this now, and they have a point to a certain extent. IBM, Google, Crowdstrike, and Amazon have unofficially started this, and I'm not surprised if other companies are doing the same
There are ways to change an organization to resolve these issues, but they are hard, expensive, and not scalable for large organizations.
Headcount is never secure as AOPs are not set in stone. Always remember that - it takes 1 bad quarter for headcount projections to be completely upended.
But justifying US headcount can be done by using a mix of points 1 and 3 that I mentioned.
It's already pretty rough for new grad right now for that reason, and it's only going to get much worse.
It is BLINDLY OBVIOUS that shareholders will see WFH as evidence that work can be done in cheaper locations and will pressure execs to make it so.
US Senior engineers who have been senior for a while are immune from this, since they already got theirs.
Juniors? Good fucking luck I guess.
I actually wonder if this is a significant factor. I work with some new moms and they are definitely dropping the ball all over the place while trying to watch over the new kid. Sensitive subject too so hard to even acknowledge or do anything about for their managers I would imagine.
Who killed shareholder value? Why would employees do this?
The work they did in the previous quarter is being sold right now and driving revenue numbers up.
It's the work that they won't do next quarter that won't hit shelves for even longer that will impact revenue eventually that they're missing out on, but that isn't measured in their financials.
Dell had a long long history of being friendly to remote work. I'm not sure what they expected trying to reverse literally decades of policies.
It might be that Mr. Dell and Dell's big investors are squeezing the last few dollars out of the company before they divest themselves from it.
> Those who chose remote are no longer eligible for promotion or able to change roles.
In some ways it's kind of a mercy; you don't have to leave! But it also feels like a weird out, a way to escape having to fire people & maybe/probably end up paying for unemployment. It leaves it up to the employee to eventually quit out.
But it only hurts a small percentage of their portfolio. They'd much rather you all millions of workers sacrifice their lives commuting than they lose 5% of their wealth.
Trillions of dollars worth of commercial real estate would be worthless if WFH was the norm.
Take Apple, who just built their spaceship campus: Land and Improvements is ~6.6% of their assets. Google, who own most of Mountain view are ~18% real estate.
So, I suppose maybe that tail is wagging the dog... For some companies?
a) The business districts of many cities become much smaller or (in some cases) effectively nonexistent if they don't have folks coming into the city's office buildings and going out for meals and entertainment throughout the day. This makes for a substantial reduction in sales tax revenue due to the reduced sales, and (for places that aren't like California and have the ability to actually make meaningful increases in property tax income over the years) property tax revenue as the on-paper value of those commercial properties plummet because there's neither people willing to put their asses into leased seats, nor foot traffic to feed those businesses anymore. This makes cities DESPERATE to get asses in seats and willing to threaten or bribe businesses with local offices to make it happen.
b) Market cap is a handy proxy to get an idea of what the size of a business might be. Given that nVidia is currently the biggest publicly-traded company in the world according to this metric, one should notice that it's a metric that really needs to be evaluated in concert with others to get a full and accurate picture of what's going on with a particular business. (It's particularly instructive to notice that if a company were to sell all of its publicly-traded stock, it would receive WAY less for the sale than the "Wow, look at that market cap!" numbers would indicate it should.)
Based on my network, their reasoning is a mix of:
- communication breakdowns due to the difficulty of building an async communication model (remember that most people are not as text/writing and async driven as Internet commenters on a tech forum), and operational work like quarterly planning, QBRs, product line prioritizations, etc can be done much faster in person instead of over 10-15 Zoom calls over 3-5 weeks.
- situations where remote workers are domiciled in a different location from where they were hired AND they didn't tell HR (this leaves companies legally liable for various tax, business incorporation, and safety regulations)
- the occasional case where a major security incident occurs due to lack of in-person verification (eg. The recent North Korea remote worker scandal, the ongoing Snowflake break)
- Justify US headcount. One of the portfolio companies I was an observer for went public a couple years ago. When they switched to remote during the pandemic, they realized they could cut down their entire US engineering presence and overhire in Eastern Europe, Israel, and India and drastically reduce margins. Most larger institutional investors are clamoring for this now, and they have a point to a certain extent. IBM, Google, Crowdstrike, and Amazon have unofficially started this, and I'm not surprised if other companies are doing the same
There are ways to change an organization to resolve these issues, but they are hard, expensive, and not scalable for large organizations.
This right here is entirely a result of government leveraging employers as a social control mechanism, that hitherto hasn't been so much of an issue; but with things like the Internet and computers, has now become highly disruptive to comply with.
The answer to "who gets the tax revenue?" has previously been "the jurisdiction of record for the employee". Anything more fine grained than that starts to become indistinguishable from serfdom, and reels of government overreach.
Not everything is a conspiracy.
I like using roads, my local library, my public schools, and my local park.
The issue is if my employer thinks I'm domiciled in Texas but I am actually working from Portugal, then my employer is paying taxes to Texas but not Portugal.
This pisses off Portugal as there is basically an additional person who's using public services but not paying for them (income and corporate taxes make the majority of tax revenue).
Why would it have to be just the board? Why not the many, many well-heeled execs at the companies themselves?
If there was an investment company holding both big chunks of commercial RE and the companies that occupy said RE I'd think this was more likely.
influance
So to the offices sheeplings!
- Local (city/state) governments who want to bring people into downtown areas to spend money are threatening to revoke tax breaks companies receive for having an office in their city/state.
- CRE lobbyists convincing city governments to do the above, threatening with a dystopian outlook of a downtown core riddled with abandoned buildings.
most open plan office space
It doesn't really matter where you run the facades, it's all the other stuff people want like bathrooms that require significant reworking.
The biggest obstacle is that in some cities the building codes contain some arbitrary and irrational provisions to intentionally make it harder
https://www.finra.org/media-center/newsreleases/2024/finra-s...
There is a lot of money to be made in WFH, in particular around tooling and residential real estate. The simpler answer is we're still figuring out in which roles and cultures which work modes work best.
Then there's Americans penchant for slavemasters aka, middle managers who's only real job is head count and stealing productivity counts.
It's interesting how very quickly this got buried.
At the time of this writing, three hours after posting, I have to go back twenty-four pages to find it, in amongst things with 2/3rds to almost 1/10th the points, posted one, two, five days ago.
I actually expected that it got flagged, and was surprised to see that it hadn't.